Mid-tier information technology (IT) firm Mphasis said it has partnered blockchain firm Bitfury for the digitisation of financial services related to international trade.
The partnership, whose financial terms were not disclosed, is expected to bring automation, transparency and efficiency in the financial services infrastructure that forms the backbone of global trade, Mphasis added in a statement.
The Blackstone-owned Mphasis said that the technology was digitising some areas of trade such as document management, customer due diligence and parts of supply chain finance.
Washington-based Bitfury provides software and hardware solutions necessary for businesses, governments, organisations and individuals to securely move assets across the blockchain.
According to Mphasis, the systems that handle mission-critical activities such as settlement, liquidity management, and foreign exchange remain highly outdated, inflexible and disjointed. This also creates a gridlock that limits visibility for all parties and hinders access to liquidity for those who need it most.
Bengaluru-based Mphasis said that the partnership aimed to solve this gridlock as these sub-optimal conditions have contributed to a global $1.5 trillion gap between the demand and supply of trade finance.
“The partnership with Bitfury will tackle major structural barriers in global trade by applying new technology to old problems. We are looking to accelerate the development of a more efficient, flexible and future-ready financial supply chain,” said Andres Ricaurte, senior vice-president and global head of payments for Mphasis.
Mphasis and Bitfury will work on new forms of tokenisation to enable instant settlement of trade transactions, reduce reliance on complex foreign-exchange infrastructure, apart from increasing the flexibility in liquidity management for financial institutions, the companies said in the statement. The new technology will function across all types of procure-to-pay networks, distribution platforms and trade finance consortia, it added.
“Using blockchain, we will create inter-operable systems that deliver the highest degrees of trust, transparency and security to this industry. We look forward to finding solutions in this fragmented financial systems, thereby making global trade more efficient,” said Valery Vavilov, chief executive and founder of Bitfury.
Earlier this week, Mphasis had reported a 12% rise in consolidated net profit for the January-March quarter to Rs 266 crore from Rs 238 crore a year earlier. Quarterly revenue grew 16% to Rs 2,025 crore from Rs 1,745 crore during the period.